Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Caterpillar - CAT - close: 61.04 change: +0.26 stop: 59.90

CAT did bounce from the $60 level and managed to out perform the DJIA with its 0.4% gain but we feel the rebound was a little anemic. We have two days left before exiting on Wednesday afternoon at the closing bell. We do not want to hold over the Thursday morning earnings report. Wall Street expects CAT to report earnings of $1.11 a share. We are not suggesting new plays at this time. Our target is the $64.75-65.00 range. The Point & Figure chart points to a $72 target.

Picked on January 08 at $ 60.45
Change since picked: + 0.59
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 4.0 million

---

Fortune Brands - FO - close: 77.70 change: +0.17 stop: 76.45

The Monday bounce in shares of FO was pretty meager and we would not suggest new bullish positions here. Our confidence in FO as a bullish candidate is quickly waning. More nimble traders may want to consider switching to put positions if FO trades under $76.50. Earnings are expected in early February and we do not want to hold over the report.

Picked on January 18 at $ 78.65
Change since picked: - 0.95
Earnings Date 02/03/06 (unconfirmed)
Average Daily Volume = 803 thousand

---

Giant Ind. - GI - close: 62.12 change: +0.52 stop: 55.45

Oil stocks continued to rally on Monday despite a minor pull back in crude prices. We do not see any change from our weekend update on GI. The Point & Figure chart shows a quadruple top breakout buy signal with an $85 target. Our target is the $66.00-67.00 range. More aggressive traders may want to aim for the $70 level. We do not want to hold over the February 20th (unconfirmed) earnings report.

Picked on January 20 at $ 60.85
Change since picked: + 1.27
Earnings Date 02/20/06 (unconfirmed)
Average Daily Volume = 279 thousand

---

Holly Corp. - HOC - close: 68.73 chg: +0.05 stop: 61.95

HOC may need to retest short-term support near its rising 10-dma before moving higher again. A bounce form the 10-dma (65.67) could be used as a new bullish entry point if you plan to aim higher. Our exit target is the $69.75-70.00 range. We would not hold over the February earnings report.

Picked on January 17 at $ 65.65
Change since picked: + 3.08
Earnings Date 02/06/06 (unconfirmed)
Average Daily Volume = 303 thousand

---

Lehman Brothers - LEH - close: 136.55 chg: +1.76 stop: 131.05

The broker stocks were the third best performing sector today. Shares of LEH rallied from the opening bell and while the stock closed off its best levels of the session LEH still posted a 1.3% gain. Our target is the $138.50-140.00 range. More conservative traders may want to consider taking profits right here!

Picked on January 09 at $131.05
Change since picked: + 5.50
Earnings Date 03/14/06 (unconfirmed)
Average Daily Volume = 2.3 million

---

Selective Ins. - SIGI - close: 57.13 chg: +1.69 stop: 53.79

Monday was a strong day for SIGI. The stock broke through resistance at its 50-dma and the $56.00 level (again). Volume came in above average and this bodes well for the bulls. Our short-term target is the $59.50-60.00 range. Watch for a dip and bounce in the $56.00-56.50 region as a new bullish entry point. We do not want to hold over the late January earnings report. Our target is the $59.50-60.00 range. FYI: SIGI might announce a stock split with its earnings report. The company last split its stock in December 1997 in the $50-52 region.

Picked on January 19 at $ 56.05
Change since picked: + 1.08
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 163 thousand

---

Wynn Resorts - WYNN - close: 57.51 change: -1.27 stop: 54.99

Where did WYNN's relative strength go? The stock tried to rally higher this morning but failed near $59.40. Volume was pretty low and that might suggest a real lack of selling pressure but the intraday chart does not look very encouraging. More conservative traders may want to wait for a move over $60.00 or the November high at 61.50 before initiating positions. We're going to target a rally into the 64.75-65.00 range. We do not want to hold over the February earnings report.

Picked on January 22 at $ 58.78
Change since picked: - 1.27
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Biotech HOLDRs - BBH - close: 193.00 chg: -2.78 stop: 201.55

BBH is moving the right direction (lower) after weakness in AMGN this morning. Shares of AMGN dipped toward its 200-dma before producing a bounce and this seems to correspond somewhat with the 190 level in the BBH. Remember, the biggest risk, and it's a noteworthy risk, is the AMGN earnings report due out on Thursday. AMGN will have a big impact on the BBH this week. There seems to be some conflicting opinions on AMGN today with some analysts suggesting caution ahead of earnings and others suggesting the weakness might be a buying opportunity ahead of earnings. Any time you play in the biotech arena you're facing higher risks due to sudden and unexpected news announcements (both good and bad). Our target is the $187.00-185.00 range above the 200-dma on the BBH.

Picked on January 20 at $195.78
Change since picked: - 2.78
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 539 thousand

---

DRS Tech. - DRS - close: 48.75 change: +0.27 stop: 51.01

Uh-oh! We see the lack of follow through on DRS' failed rally from Friday as a big warning sign. It doesn't help matters that S&P just announced that they're moving DRS from the smallcap 600 index to the midcap 400 index. The stock never traded under $48.49 today as this level acted like support all session long. Volume was pretty strong today too so we're not suggesting new bearish positions and more conservative traders may just want to jump out early to protect themselves. Our target is currently the $45.00-44.00 range.

Picked on January 17 at $ 47.95
Change since picked: + 0.80
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 275 thousand

---

Express Scripts - ESRX - close: 86.15 chg: +0.05 stop: 90.01

ESRX dipped to its simple 50-dma midday and bounced. That's why we put our trigger to buy puts under the 50-dma at $84.95. If triggered we'll target a decline to the rising 100-dma (currently 74.28). We will be adjusting our target to account for the rising 100-dma. At the moment we'll use an exit zone of $77.00-75.00.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/22/06 (confirmed)
Average Daily Volume = 2.1 million

---

Omnicare - OCR - close: 55.02 change: +0.27 stop: 57.51

OCR produced a minor oversold bounce today and it may not be over yet. We would not be surprised to see OCR rebound toward the $56.00 level or its 100-dma, now overhead, at 56.19. A failed rally near $56 could be used as a new bearish entry point or consider waiting for a new relative low under Friday's low at 54.50. Our target is the $51.00-50.00 range before its February earnings report.

Picked on January 20 at $ 54.99
Change since picked: + 0.03
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 1.3 million

---

Sears Holding - SHLD - close: 121.26 chg: +0.50 stop: 124.05

Our trading range play in SHLD is now open. Around lunchtime the stock dipped intraday and then rebounded under support at the $120 level and its 50-dma. Our trigger to buy puts was at $119.95. We need to be careful here. The stock can be somewhat volatile and our stop loss at $124.05 isn't that far away. We would not suggest new bearish positions until SHLD trades under $120 again. Our target is the $116.00-115.00 range.

Picked on January 23 at $119.95
Change since picked: + 1.31
Earnings Date 03/07/06 (unconfirmed)
Average Daily Volume = 2.5 million
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

---

Building Materials - BMHC - cls: 74.49 chg: -0.06 stop: n/a

The failure to rebound today looks bearish. We are not suggesting new strangle positions at this time. The options in our strangle play are the March $90 calls (BGU-CR) and the March $70 puts (BGU-ON). Our estimated cost is $8.20. Our target is $12.50 by March expiration.

Picked on December 18 at $ 80.95
Change since picked: - 6.56
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 527 thousand

---

Encana Corp. - ECA - close: 48.09 chg: +0.49 stop: n/a

Energy stocks continued to rally on Monday. Meanwhile shares of ECA bounced from earn early morning dip toward the $48.00 level. We're not suggesting new positions. Our strategy involves the April $50 calls (ECA-DJ) and the April $40 puts (ECA-PH). Our estimated cost is $3.45. We are aiming for a rise to $5.95.

Picked on January 10 at $ 45.56
Change since picked: + 2.23
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

---

Ryland Group - RYL - close: 75.12 change: -0.07 stop: n/a

Investors are waiting for RYL's earnings report due out after the closing bell on Tuesday. Today offered us a great entry point to open new strangle positions and as long as RYL doesn't gap open tomorrow then we'll probably have another opportunity tomorrow. We are suggesting an entry range in the $75.50-74.50 zone. Our strangle involves the April $80 calls (RYL-DP) and the April $70 puts (RYL-PN). Our estimated cost is $7.00. Our target is $12.00. We do not want to open positions after the earnings report. Wall Street is looking for RYL to turn in profits of $3.12 a share.

Picked on January 22 at $ 75.19
Change since picked: - 0.07
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Ipsco Inc. - IPS - close: 89.45 change: +3.35 stop: 81.95

Target achieved. Steel stocks were a strong industry group today after IIIN just blew away the earnings estimates today with a strong report. Shares of IPS responded with a 3.89% gain on strong volume. Our target was the $89.00-90.00 range.

Picked on December 30 at $ 83.55
Change since picked: + 5.90
Earnings Date 02/06/06 (confirmed)
Average Daily Volume = 396 thousand
 

Dropped Puts

Scotts Miracle grow - SMG - cls: 46.09 che: +0.25 stop: 47.05

Time's up. Our plan was to exit today at the closing bell to avoid holding over SMG's earnings report due out tomorrow morning. Wall Street is estimating earnings at a negative 82 cents a share.

Picked on January 01 at $ 45.24
Change since picked: + 0.85
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 354 thousand
 

Dropped Strangles

None
 

Play Update Archives